MUJI USA Files for Bankruptcy After Running at a Loss for 3 Years

MUJI USA Files for Bankruptcy After Running at a Loss for 3 YearsMUJI USA Files for Bankruptcy After Running at a Loss for 3 Years
Maina Chen
July 13, 2020
Muji U.S.A Ltd. filed for bankruptcy in a statement posted on Friday due to substantial losses from COVID-19.
The minimalist Japanese retail company under Ryohin Keikaku Co., selling everything from household items, to garments, furniture, stationary and more, aims to “restructure its businesses.”
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COVID-19 impact: Muji filed for Chapter 11 due to a number of reasons, with losses suffered in the U.S. pushed further by the pandemic.
  • The filing “listed liabilities of $50 million to $100 million, owed to between 200 and 999 creditors,” according to CNN.
  • COVID-19 greatly affected sales with Ryohin Keikaku reporting “an operating loss of 2.9 billion yen ($27.2 million) for the quarter through May,” according to Reuters.
  • Bloomberg also reported that according to its 2019 sales, “the U.S. business has been operating at a loss for the past three fiscal years. Last year, it had a loss of around $10 million, according to its bankruptcy statement.”
  • This can also be seen in Ryohin Keikaku’s 2019 fiscal year briefing, in Europe and the U.S., where businesses in those locations struggled and “dropped into the red due to unachieved sales targets.”
  • Ryohin Keikaku President Satoru Matsuzaki said, “I will personally realize the restructure in the U.S,” according to
International Mujis: A Forbes article mentioned how Muji isn’t necessarily doing well overseas as well, with its failure to predict demand, hoarding unsold inventory stock and refusal to mark it down, and political tensions within Asian nations where the storefronts are located.
  • In response to questions of stores elsewhere, such as Canada, Muji responded saying, “operations in Canada will not be impacted.”
  • Muji Japan already moved swiftly to e-commerce in May and featured 250 items from its large collection, according to Insideretail.
  • In a separate statement on Friday via Sapna Maheshwari of the New York Times, the company shared that the restructuring efforts focus only on the U.S., and “MUJI international operations in Japan, and elsewhere around the globe will not be impacted.”
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Optimism and shared sadness: Contrary to what some may believe, filing for Chapter 11 does not mean the business will immediately shutter all its doors. One of the directions the retail company will take is focusing on e-commerce.
  • Filing for Chapter 11 protects a business from immediate closure because within that timeframe, the debtor can propose a “plan of reorganization to keep its business alive and pay creditors over time,” according to United States Courts. It is Chapter 7, where liquidation of assets most likely calls for closure.
  • A portion of Muji’s products can be found on Amazon and its operating retail locations and MUJI U.S. online store will remain open with COVID-19 precautions in place.
  • As Muji supporters learned of the news, many in the community expressed their sadness in finding out that some of the physical stores might close.
Feature Image via Getty
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